Goal seek in Excel

A kind of reverse engineering wherein you know the answer and want to provide a value to the independent variable to reach the answer. Goal seek can be used on single independent variable only. The sanity of the data should also be checked for the result.

E.g.  1400 = 900/(1+r) + 1000/ (1+r)^2 . Now set r to any random value, say 10% (don’t use ‘=’ sign while entering the value in the cell). The value comes to be 1644.628. In another cell calculate the difference between 1644.628 and 1400. Those using Office 2007 should go to data->what if analysis->goal seek. Enter the parameters -> Set the cell with value of the difference to zero by changing the cell which contains the r value (i.e. 10%). Then Excel will automatically calculate the value of r as 23%.

The sanity check means that if the values sum of values 900 and 1000 is less than 1400, r will be negative.